Potanin ahead of Deripaska in NorNickel Dispute

Moscow. Vladimir Potanin has gained an advantage in the Norilsk Nickel dispute: The billionaire increased his share of the group to 30 percent. Additionally a Caribbean court ruling throws a bad light onto his opponent Oleg Deripaska.

Norilsk Nickel shareholder Vladimir Potanin is well prepared for the upcoming shareholder meeting on Friday. Since October the proportion of his shares in the holding company Interros, Norilsk Nickel had increased from 25 to 30 percent, Potanin said in an interview.

The shares were purchased on the open market after the agreement with RUSAL on common principles for leading Norilsk Nickel had become invalid, he added.

Five percent for Norilsk Nickel at an estimated price of ˆ1.5 billion

Potanin was not available to comment on the price of the shares. According to the newspaper "Vedomosti" the billionaire, who is with a fortune of $17.8 billion (ˆ12.9 billion) as per the new Forbes list number 34 worldwide, paid for the shares the equivalent of ˆ1.5 billion.

In comparison the Potanin linked Norilsk Nickel management had offered Oleg Deripaska RUSAL group $12.8 billion (ˆ 9.5 billion ) for 20 percent of its shares - a premium of 40 percent over the current market price and more than 60 percent above the share price that Potanin most likely paid for the five-percent package.

Deripaska had rejected the offer as still too low. Even his partners Mikhail Prokhorov and Rusal Viktor Vekselberg distanced themselves from the billionaire. The two Rusal minority shareholders agree with the offer.

There are also problems looming for Deripaska from the Caribbean. Reminder: A court on Nevis, at the urging of Deripaska, had initially prohibited that the shares of the Norilsk Nickel daughter companies Corbierre and Raleigh (approximately 15 percent) be included in the vote at the parent company’s AGM.

Court feels deceived by Deripaska

However, on appeal the court had annulled its first decision. The reason given was that the court had been "deceived" by Rusal.

Due to the urgency of the matter, as requested by RUSAL, the (first) hearing had taken place in the absence of the defendant. Therefore, it had been the duty of RUSAL, to disclose all important facts including the counter arguments of the opposition. It is now clear that this had not been the case.

Additionally RUSAL did not disclose that similar complaints had already been rejected by the Russian Prosecutor General's Office and a court London. "Consequently, the court was terribly misled" is the tribunal’s reason for rejecting the Deripaska claim.

Potanin has advantage at the shareholders meeting

At the forthcoming shareholders' meeting the new appointments to board will be decided upon. In this way Deripaska had tried to move the balance of power within the group in his favour.

This does not seem possible now. With 30 percent of the vote Potanin will be able to name at least five out of the 13 members of the Supervisory Board.

Two seats will be chosen by the Norilsk Nickel management. If Deripaska has not secured additional shares within the market (no comment from Rusal), he will only be able to name four board members.